Mike Tharp: Merced County rising out of the mire of economic despair

We're movin' on up

February 25, 2012 

It's official!

Stop the presses!

You read it here first!

Insert whatever newspaper cliché you like here.

The 'Copy!' column hereby decrees our long local nightmare is over. We've wallowed in recession -- nearly a depression -- for four years. We touched bottom.

Now were on the way back up. "We" means Merced County.

The evidence has been piling up for awhile. We've watched it with the skepticism of people who've been down so long it looked like up to us.

But the signs are too many, and too convincing, to ignore.

Last August I took over writing the weekly Monday Business Profile, a story published in the Sun-Star featuring a particular establishment in our area. After 14 years as a reporter for the Wall Street Journal in Dallas, Tokyo and San Francisco, I figured if I didn't know how to write a decent business story, something was wrong.

All told, there have been more than two dozen profiles of companies and entrepreneurs -- ranging from a one-man IT startup and a two-man ink cartridge replacement outfit to giants such as Kagome, Laird and Minturn Nut that employ hundreds and ship their products to scores of countries.

Without exception all expressed optimism -- not hope -- about both their own ventures and our surrounding economy. The distinction is important, as an American general told me in Iraq, because hope is not a plan.

Their optimism was based on their personal and professional experience in the market -- the great equalizer. Adam Smith rules these folks' ideas and actions -- if it works and it sells, they're successful.

We got even more confirmation Thursday at the Economic Summit 2012 held at the fairgrounds. The event was sponsored by PG&E, Hilltop Ranch, Wallace Transportation, Merced College, the Merced County Farm Bureau, the Merced Irrigation District, Educational Employees Credit Union, the Greater Merced County Chamber of Commerce, Dan Hong of youbiquicast and www.betweenamigos.com.

A parade of speakers explained the reasons to be upbeat to some 250 people -- up from 113 a year ago. The turnout itself is an economic indicator.

In the order they spoke, here's what they had to say:

Congressman Dennis Cardoza: "We will have more jobs and a brighter future in the years to come."

Ed Thompson of American Farmland Trust outlined the benefits of smart ag and non-ag growth: cleaner air, improved health, lower taxes, better services, reduced energy and water costs and lower greenhouse gases.

Sean Haynes of Rabobank noted there's been an 11 percent return on investment on ag land in the last 20 years, 60-plus percent of that growth from production.

Steve Tinetti of Tinetti Real Estate examined Merced's three industrial parks and said that at the Airport Industrial Park, 70,000 square feet of space is in escrow by two manufacturers to expand existing facilities. In the Western Industrial Park, California Healthy Treats: 25 employees at its operation. On Cooper Avenue, land has been sold to a frozen food processor that will employ 65 people. "The entire county is an enterprise zone," he said. And he praised the "pro-business attitude of the city staff, who've gone out of their way to induce new business and industries." Five senior officials recently showed up at a site to help a company's expansion plans.

Eddie Laplante, also of Tinetti Real Estate, said companies can now buy commercial space for as little as 50 cents a square foot. The four acres vacated by Circuit City, a long-time occupant, have caught the interest of CVS, Harley Davidson and the city of Merced. "Downtown Merced has become again the epicenter of our community," he said. "The city of Merced has bent over backwards." Fees, permits and other processes "have gotten far more rapid," and he repeated that city staffers "are willing to come out to a project and tell us what we need to make this happen -- two years ago you would not have seen that."

Loren Gonella summed up the residential market this way: "We were the first to hit bottom and we'll be the first to come out of it." Some 85 percent of Merced residents can now afford to buy a home, compared to 11 percent in 2005. He estimated that for every dollar spent building a house, nine times that spins through the economy.

Reporter Mike North wrote earlier this week that personal income will rise and unemployment will fall for Merced County's population in coming years, if calculations from the University of the Pacific's Business Forecasting Center are on the mark. He also reported that the county Planning Commission approved a conditional use permit for a project that would use two existing buildings at Castle to establish a small-engine repair shop, a custom motorcycle shop, a jeans manufacturing facility and a medical office.

And we've all heard of the economic ripple effects washing through our economy from UC Merced and Mercy Medical Center. Those will only increase.

As Laplante nailed it: "Merced is a world of its own. We are extremely different."

The economic summit and forecast were the brainchild of Dave Spaur, outgoing CEO of the Merced Economic Development Corp., which has been dismantled for lack of funding. He's compiled a PowerPoint presentation that states MCEDCO was responsible for bringing nearly 3,800 jobs to the county with an average annual salary of $39,000; those workers generated $3 million a year to the county in property and sales taxes and $25 million a year to the city.

The summit may be his swan song, but he can look back with satisfaction on his track record. Now it's up to the rest of us to keep the recovery going.

And it will go on.

You read it here first.

Executive Editor Mike Tharp can be reached at (209) 385-2456 or mtharp@mercedsunstar.com

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